World

Italy's Renzi to spell out reform deal with Berlusconi

ROME (Reuters) - Italian centre-left leader Matteo Renzi can expect a hostile reception from sections of his Democratic Party (PD) when he gives details on Monday of an electoral reform pact with opposition leader Silvio Berlusconi.

Since being elected leader of Italy's largest party in December, Renzi has held talks with all the other parties on how to reform an electoral law blamed for the country's chronic political instability.

But his meeting on Saturday with former prime minister Berlusconi, who is barred from parliament after a conviction for tax fraud, sparked discontent from small parties backing Enrico Letta's government as well as those in opposition.

Stefano Fassina, from the left-wing of the PD, who resigned as deputy economy minister this month after a dispute with the more moderate Renzi, said he was "ashamed" to see Renzi meet with a convicted criminal at the PD's headquarters.

Any deal on electoral reform between the two should be put to a referendum of the PD's members, he said.

Renzi, the dynamic, 39 year-old mayor of Florence, emerged from the meeting to announce "profound agreement" over an electoral law that would remove the blackmailing power of small parties and ensure stable, durable governments.

He said he would spell out the details at the PD meeting due to begin at 1500 GMT.

Analysts say electoral reform is vital for Italy to achieve the stable government needed to reform a chronically sluggish economy that has not grown for over two years and tackle the euro zone's second highest debt burden after Greece.

In last year's election, no party gained enough votes to govern alone, plunging the country into political stalemate before the creation of a broad-based coalition government which has constantly bickered and struggled to produce reforms.

The deal with Berlusconi was widely reported in Italian media as being based on proportional representation, with small constituencies each electing four or five representatives and a winner's bonus of 15-20 percent of seats.

TWO-ROUND SYSTEM?

It was attacked by small parties backing Letta's coalition, including the New Centre Right (NCD) of Deputy Prime Minister Angelino Alfano and the Civic Choice of ex-premier Mario Monti, which fear it would put at risk their future survival.

Renzi said on Monday the criticism was based on speculation.

"I invite the experts to read the proposal before commenting, wait until 4 o-clock," he tweeted.

A source close to Renzi said the reform was actually based on a two-round voting system, similar to the ones used in Italian mayoral elections.

This kind of system is favoured by Alfano as well as by most of the PD, but has so far been resisted by Berlusconi, mindful of the centre-right's traditionally weaker showings in local elections than in national ones.

Davide Faraone, a member of Renzi's inner circle, said the new law "will allow the winner of elections to be able to govern with stability and means we will never again have broad coalitions."

Renzi, who makes no secret of his ambitions to become prime minister, frequently criticises Letta - who is also from the PD - and says he is determined to push ahead with electoral reform even if it increases strains among the ruling coalition.

"We have made more progress in the last three weeks than was made in the previous 10 years," he said last week.

Renzi said he and Berlusconi agreed not only on a reform of the electoral system but also on drastically cutting the powers of the Senate, which would no longer be an elected chamber, and reducing the legislative autonomy of the regions.

Such changes would require parliamentary approval and constitutional amendment, a lengthy process which should ensure that Letta's government survives at least into 2015.